Just for fun

Five waves up from the 2346 low are actually c of 2.  The tape from 2940 to 2603 on the S&P was the closest thing to a five-wave impulse down that we have seen in all of this.

We would, of course, need "an event" to dive back to the 2007 (year) highs.

The lower line at 1332 is the long-term Fed policy channel, would expect them to shovel a fresh load of fake credit-money into the hoppers on that one (June FOMC), because they have no choice.

c of 2 up channel (5 waves)

Bradley turn

A major Bradley turn, scheduled for today.  If this bounce is out of gas, and we are actually building a five-wave move off the October high, then look for the 5th wave to "extend", since the 3rd wave did not.  Is this some sort of diagonal?  the waves are sloppy triplets, and we have overlap of the 1st and 4th waves.  It's no textbook impulse.

We would hit support from the two earlier lows in the first week of March.  This drop would be particularly dispiriting, for its magnitude, but makes a nice buy into June FOMC.

What would force the hand of the Fed to hike one more time, and force a "Lehman moment" for this cycle?

SPX daily

edit:

What if we are now actually in a wave 2 of a much larger diagonal?

SPX daily diagonal to 1810

A triangle would work well here

We have overshot the .382 retrace of the big drop from 2800 SPX, but this bounce has done the important work of kneecapping the $VIX. 

A bear would want to see it back off and resolve as a triangle into the FOMC at the end of the month.  We can still find our way back to 2520 in a sensible way, preferably with a $VIX of 18 or lower.

The break from the triangle would be violent, potentially even more steep than what we are counting as the third wave.  But it would mark a climax in the selling that would then reverse in a stronger and more sustained retrace.

At some point this year the real damage is done.

SPX daily